Coincidentally, Breuer’s impending departure comes after “Frontline” broadcast a harshly critical report Tuesday night. The PBS program, entitled “The Untouchables,” was full of assertions that under Breuer the DOJ went after small fish in the mortgage-market abuses that nearly paralyzed the country’s financial system, while the big fish swam free.

If you missed The Untouchables, check it out here. The transcript is here. [More...]

According to Breuer, the reason for lack of criminal prosecutions at the top of the mortgage industry was inability to prove intent to defraud:

But in those cases where we can’t bring a criminal case — and federal criminal cases are hard to bring — I have to prove that you had the specific intent to defraud. I have to prove that the counterparty, the other side of the transaction, relied on your misrepresentation. If we cannot establish that, then we can’t bring a criminal case.

...“But when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases,” Breuer said.

He also said:

In reality, in a criminal case, we have to prove beyond a reasonable doubt — not a preponderance, not 51 percent — beyond any reasonable doubt that a crime was committed. And I have to prove not only that you made a false statement but that you intended to commit a crime, and also that the other side of the transaction relied on what you were saying. And frankly, in many of the securitizations and the kinds of transactions we’re talking about, in reality you had very sophisticated counterparties on both sides.

Others have criticized Breuer for entering too many non-prosecution and deferred prosecution agreements of corporations. Brandon L. Garrett and Jon Ashley, of the University of Virginia School of Law, have compiled this database of corporate criminal plea agreements.

Deferred Prosecution agreements can be good things. The corporation admits it was at fault, there are usually big fines and monitors are placed with the corporation to avoid future misconduct. Also, corporations cannot be put in jail, and there is concern they can be forced out of business, which can cost a lot of innocent workers their jobs. Here is a series of posts at White Collar Crime Blog on deferred prosecutions of corporations.

On the other hand, in a recent law review article, Gabriel Marcus argues that from 2001 to 2010, no publicly traded corporation has failed after being convicted. He argues for more corporate criminal prosecutions.

The Department of Justice (“DOJ”) has implicitly accepted this view by declining to prosecute many large companies in favor of using criminal settlements called deferred prosecution agreements, or “DPAs.” Yet, there is no evidence to support the existence of the “Andersen Effect” and the much-hyped corporate death penalty. Indeed, no one has ever empirically studied what happens to companies after conviction. In this Article, I do just that.

Using the database of organizational convictions made publicly available by Professor Brandon Garrett, I find that no publicly traded company failed because of a conviction in the years 2001–2010. Moreover, many convictions included plea agreements imposing compliance programs that advocates have pointed to as a key justification for using DPAs.

Because corporate convictions do not have the terrible consequences they were assumed to have, and because they can be used to obtain compliance programs just as DPAs can, the DOJ should prosecute more lawbreaking companies and reserve DPAs for extraordinary circumstances. In the absence of some other justification for using DPAs, the DOJ should exploit the stronger deterrent value of corporate prosecution to its full capacity.

As a defense attorney, I don't think much will change whether Lanny Breuer or someone else occupies the position of Chief of the Criminal Divison. Anyone who is appointed to this postion will be a long-standing current or former prosecutor, and in my experience, they pretty much all share the same mindset.

...is a genuine plague on the economy and, hence, the country. Only it's not always crime because of regulatory capture by the industry (and not simply because they don't think they can prove intent, which I find a lacking excuse when talking about corruption on this kind of massive financial scale), so I wish Breuer would also add that to his reasons, since it's actually the more difficult obstacle IMO. Of course, to add this would mean admitting he was essentially a lackey of the industry he's supposed to be regulating and policing and prosecuting for crimes.

And remember, a mere fraction of a percentage point tax on financial transactions would bring in more revenue than all federal income tax. Ponder that for a moment. A tax of a fraction of one percent. On the biggest players in the biggest game in the economy. Hardly a burden, and it's hardly a large enough percentage, and it should be a no-brainer. But...(sound of crickets)...you won't hear anyone NEAR the levers of power propose it seriously, or go to the mat for it. Bought and paid for, almost all of them.

..."and federal criminal cases are hard to bring -- I have to prove that you had the specific intent to defraud."_________________________________

So an investment bank puts together a bond where, based on inside knowledge and expertise, knows a majority of its tranches (securities) will, most probably, fail. They, then sell the bond to an unsuspecting customer as a high quality investment with the assurance that their expert research indicates it to be a great candidate for appreciation.

So, that's step #1. They make a fat commission selling a security to a customer, telling him/her it will go up in value.

Then, having constructed the security for the express purpose of it failing, they go into the market and "sell it short," betting it will go down in value.

And, that's step #2. They screw the customer by telling him/her the security will go up in value, and then bet against him/her knowing that, due to its design, it will go down in value.

That's pretty good work, if you can get it, isn't it? You make a fat commission misrepresenting the product on the front side. And, you make the really big bucks betting taxpayer money on the rigged security on the back side. it's almost like my lifelong fantasy, getting tomorrow's newspaper today.

these firms are happy to budget for fines and penalties as one more cost of doing business, because it's allowing them to keep doing what they want to do. And given the obscene amounts of money these firms are raking in, the fines - even with "billion" or "million" in the amounts, are chump change. Too bad we're the chumps, huh?

And, golly - with the government struggling to stay funded, isn't it better to just keep collecting fines than have to foot the cost of investigations and trials and appeals, not to mention, have to maintain all those Club Feds around the country?

I'm sure we'll all cheer when Lanny gets a Presidential Medal of Freedom that he can showcase in the corner office of his next cushy job...

...why else would they have done it ? Stupidity, not sure that would jive with their bottom lines.

More importantly, Breuer isn't a judge or jury and I think some of these cases should have been brought forward and let the jury decide if their behavior was criminal. One test balloon for christ sake.

I doubt they could find 12 people who haven't been jacked in some way from that industry. Doesn't seem like it would take much effort to prove to us what we already know.

If history is any indication, he already has some cushy 'consulting' job on WS.